350 year payment method ends
(18 December 2009 – UK) The decline of cheques has been widely documented over the years and finally the UK’s banks have voted to stop clearing cheques by the 31st October 2018.
During a public consultation last May, the Payments Council proposed that cheques be phased out by 2018, but the plan was dropped due to concerns about the setting of an ‘end date’.
However, the Council reconvened over the matter coming to a more definite conclusion this time, saying that they have to have an active involvement to help prevent confusion and deliver cheque alternatives that are acceptable to the cheque user.
With the end of October 2018 deadline set, the council has said that a review will be conducted in 2016 to determine whether sufficient progress has been made to press ahead with the abolition date of 2018.
Paul Smee, chief executive, Payments Council, said that customers aren't likely to see any immediate change as the target date is still a long way off. This announcement marks the start of extensive work that needs to be done to ensure that everyone has a viable alternative, should the cheque clearing close.
The Payment Council aims to be very transparent and will continue to consult fully with all interested parties, Mr Smee added.
According to the Association for Payment Clearing Services (APACS), £7.1 billion (A$12.8 billion) of retail spending was by cheque in 2008, only three percent of all payments, and this figure represents a 4.1 percent decline on the previous year.
The vote that has concluded the life of cheques will save banks hundreds of millions a year, as the cost of processing a cheque is around £1 (A$1.79), four times more than electronic payments.
While banks are all for the demise of the cheque, Age Concern and Help the Aged, elderly advocate groups, do not share the same enthusiasms issuing a statement saying that the move will hit the elderly hard.
Andrew Harrop‚ head of public policy, Age Concern said that chip and pin is problematic for many older and housebound people and it is known that 6.4 million over 65's have never used the internet. Without cheques‚ we are very concerned people will be forced to keep large amounts of cash in their home‚ leaving them vulnerable to theft and financial abuse.
However, the Council reconvened over the matter coming to a more definite conclusion this time, saying that they have to have an active involvement to help prevent confusion and deliver cheque alternatives that are acceptable to the cheque user.
With the end of October 2018 deadline set, the council has said that a review will be conducted in 2016 to determine whether sufficient progress has been made to press ahead with the abolition date of 2018.
Paul Smee, chief executive, Payments Council, said that customers aren't likely to see any immediate change as the target date is still a long way off. This announcement marks the start of extensive work that needs to be done to ensure that everyone has a viable alternative, should the cheque clearing close.
The Payment Council aims to be very transparent and will continue to consult fully with all interested parties, Mr Smee added.
According to the Association for Payment Clearing Services (APACS), £7.1 billion (A$12.8 billion) of retail spending was by cheque in 2008, only three percent of all payments, and this figure represents a 4.1 percent decline on the previous year.
The vote that has concluded the life of cheques will save banks hundreds of millions a year, as the cost of processing a cheque is around £1 (A$1.79), four times more than electronic payments.
While banks are all for the demise of the cheque, Age Concern and Help the Aged, elderly advocate groups, do not share the same enthusiasms issuing a statement saying that the move will hit the elderly hard.
Andrew Harrop‚ head of public policy, Age Concern said that chip and pin is problematic for many older and housebound people and it is known that 6.4 million over 65's have never used the internet. Without cheques‚ we are very concerned people will be forced to keep large amounts of cash in their home‚ leaving them vulnerable to theft and financial abuse.
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